Visions - Fall 2017 - 6

ENERGY GROUP

Cove Point Facility Readies Operations,
Prepares to Export LNG to Japan

ack in March of 2015, construction broke ground
on Dominion Energy Cove Point LNG ("Dominion").
It is hard to believe that just less than three years
later, the facility is planned to become fully operational
in 2017. The operation looks to ship 1.4 million tons of
LNG (a universal abbreviation for liquefied natural gas)
per year for Tokyo Gas and 0.8 million tons of LNG per
year for Kansan Electric. ST Cove Point LLC, originating
from Pacific Summit Energy, is currently headed by
President Yoshihiro Kakizawa.
Both Sumitomo Corporation (SC) Group Company ST Cove Point and GAIL Global (USA) LNG
LLC have each contracted for half of the marketed
LNG capacity, with Dominion Energy having fully
subscribed the marketed capacity of the project with
signed 20-year terminal service agreements. These
agreements with Tokyo Gas and Kansai Electric
are the first long-term LNG sales agreements with
Japanese buyers in the long history of SC, and the
Dominion Cove Point project is only the second
large-scale LNG export project ever based in the US.
Also, this is the first "tolling" service LNG project in
the US. This transaction requires that tolling customers
self-procure the natural gas which is to be liquefied at
the terminal. In this project, Pacific Summit Energy is
in charge of the natural gas procurement.

"The project plays a very important role in our natural gas value chain vision in the US," said Kakizawa.
"First, we established PSE as the natural gas trading
arm, and it grew into the 10th largest gas trading
entity in volume. Second, we acquired certain shale
gas assets. Then, we stepped in to get a foothold in
the mid-stream liquefaction capacity to complete
our value chain."
Pacific Summit Energy's day-to-day participation
will include STCP purchasing all required gas for
liquefaction from PSE at the gate of the Terminal.
PSE will purchase such gas from US natural gas
market, fully utilizing its marketing intelligence.
"Our company, ST Cove Point LLC, is in charge
of the Project, opening an office in Richmond, VA
this past April," Kakizawa said. "The STCP office
is beside Dominion's office and 2.5 hours from the
Terminal. We can keep very close communications
with Dominion and the Terminal for a smooth and
on-schedule start-up of the Project."
As a fuel resource, natural gas leaves a smaller carbon
footprint than most fossil fuels; gas consumers have
new international choices of where to buy this

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Fall 2017

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